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Companies a and B Both Report Net Income Growth of 12

Question 235

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Companies A and B both report net income growth of 12% per year.Company A has a receivables turnover ratio of 5.6,which is lower than last year.Company B has a receivables turnover ratio of 11.3,which is higher than last year.All other things being equal:


A) Company A is more effectively managing its receivables.
B) Company B is more effectively managing its receivables.
C) Company A's days to collect is lower than Company B's in both years.
D) Company B's days to collect increased.

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